Dean & Dyball v Kenneth Grubb Associates [2003] EWHC 2465

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

If a respondent denies it is liable to pay the claimant anything, then changes to quantum in the Notice from the quantum previously claimed will not of themselves mean that no dispute has crystallized at the time of the Notice. If an adjudicator follows an agreed procedure it will be difficult to show he has acted unfairly; conversely, if he has not followed the agreed procedure it may be relatively easy to show he has acted unfairly.

HHJ Seymour QC, Technology and Construction Court

28 October 2003

D&D, a contractor, engaged an engineer, KGA, to design a tidal lock gate ('the Gate') to a marina. D&D said that the Gate was defective and claimed against KGA. D&D referred its claim to adjudication. The adjudicator gave a decision in favour of D&D, which D&D sought to enforce.

The Judge enforced the adjudicator's decision, rejecting two defences advanced by KGA.

KGA said that the adjudicator lacked jurisdiction, there being no dispute when D&D's claim was referred to adjudication because in the Notice of Adjudication D&D claimed a higher amount than it had previously.

The Judge held that if a respondent denies it is liable to pay a claimant anything, then changes to quantum in the Notice from the quantum previously claimed will not of themselves mean that no dispute has crystallized at the time of the Notice. If (unusually) liability is not in dispute when the adjudication starts and the formulation of quantum in the Notice is new, so that the respondent has not had the opportunity to consider it, it is 'likely to be difficult' to say that there is a dispute.

When D&D served the Notice, KGA was denying liability. The changes in the quantum of D&D's claim in the Notice did not mean that a dispute had not crystallized when the adjudication began. A dispute had been referred to the adjudicator and he had had jurisdiction to decide it. It did not avail KGA that D&D had not taken up KGA's suggestion of a meeting before the adjudication started.

The Judge also rejected KGA's defence that the adjudicator reached his decision contrary to the rules of natural justice, having heard evidence from D&D's witnesses in the absence of KGA.

The Judge held that it is fundamental to know the case one has to meet and have a proper opportunity to meet it. However, what natural justice required in adjudication was likely to depend upon whether a procedure for conducting the adjudication had been contractually agreed. If so, it was likely to be difficult to show that the adjudicator had acted unfairly by following the agreed procedure. Conversely, it might be relatively easy to show that he had acted unfairly if he had not followed the agreed procedure. Natural justice did not necessarily require that a party should have an opportunity to cross-examine the other party's witnesses, although it may do, especially if the credibility of a witness is in issue. Also, it did not necessarily require evidence for one party to be given in the presence of the other party.

The adjudicator was empowered (as he essentially did) to take evidence from D&D's witnesses and to indicate to KGA what those witnesses had said to which he was minded to attribute importance. This was because KGA's appointment incorporated the ACE Conditions, which provided that the Construction Industry Council Model Adjudication Procedure governed adjudications under the appointment. Rule 17 gave the adjudicator 'complete discretion' as to how to conduct the adjudication and stated that he could 'meet the Parties separately'. However, absent Rule 17, the Judge would have had 'some doubts' as to whether it would be appropriate to hear one party's witnesses in the absence of the other party.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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